Currency Derivatives Market

Overview of the Currency Derivatives Market

Founded in 2007, the JSE’s currency derivatives market allows for the on-exchange trading of currency futures and options, giving market participants an opportunity to hedge against currency risk, diversify internationally as well as take a view on the movement of underlying foreign exchange rates.

The JSE offers a wide range of currency derivatives, tracking the rand exchange rate to the United States Dollar, Euro, British Pound, Australian Dollar, Japanese Yen, Swiss Franc, Botswana Pula, New Zealand Dollar and Canadian Dollar. In recent years, the JSE has brought more innovative products to the market, including (derivatives that track a basket of currencies and) tailored contracts that allow for the selection of a preferred expiry date and bespoke contracts tailored to clients’ needs.

Features:

Currency derivatives trade on an electronic trading platform that is efficient, automatic and transparent
Currency derivatives can be traded by South African and non-resident individuals, as well as South African and non-resident corporate entities. No limits apply
Resident financial service providers, collective investment schemes, pension fund organisations and insurers can trade currency derivatives subject to their foreign portfolio allowance

Clearing and settlement

Compliance of the counterparties is guaranteed by JSE Clear (the JSE’s clearing house) for all derivatives contracts. Currency derivatives contracts are cash settled in Rand and there is no physical delivery of the underlying foreign currency.